Officials confirm different IRS treatment of conservatives, liberals

The Internal Revenue Service failed to subject liberal groups seeking tax-exempt status to the same rigid scrutiny as tea party groups and other conservative organizations, the agency’s acting chief and a Treasury Department inspector general confirmed Thursday.

Testifying before a hostile House Ways and Means Committee, Acting IRS Commissioner Daniel Werfel acknowledged publicly the existence of a “be on the lookout” list, shorthanded as a BOLO list, which included the term “progressives.” Democrats have insisted this list proves that the inappropriate IRS treatment of conservative groups extended to liberals.

But Werfel’s acknowledgement of a list involving “progressives” came shortly after a letter to a top Democrat from J. Russell George, the Treasury Department’s inspector general for tax administration, was made public. In it, George made clear that liberal organizations simply were not subjected to the same kinds of inappropriate IRS treatment as were conservative groups.

Werfel, who told the committee he is nonpartisan, did not dispute GOP assertions that "progressive" groups got softer treatment from the IRS and said he continues to investigate "what were the circumstances that caused these inappropriate labels to occur."

“We did not find evidence that the criteria you identified, labeled ‘Progressives,’ were used by the IRS to select potential political cases during the 2010 to 2012 timeframe we audited,” George wrote to Rep. Sander Levin of Michigan, the ranking Democrat on the tax-writing Ways and Means Committee. “The ‘Progressives’ criteria appeared on a section of the ‘Be On the Look Out’ (BOLO) spreadsheet labeled ‘Historical,’ and, unlike other BOLO entries, did not include instructions on how to refer cases that met the criteria.”

George added that while “we have multiple sources of information corroborating the use of Tea Party and other related criteria we described in our report, including employee interviews, emails, and other documents, we found no indication in any of these other materials that ‘Progressives’ was a term used to refer cases for scrutiny for political campaign intervention.”

Of 298 IRS cases reviewed by George involving potentially political decisions, only 14 included the term progress or progressive, the letter said, and only a handful actually received a deeper IRS review. That compares to 100 percent of the groups with “tea party” in the title.

George’s letter was explosive because it appeared to shoot down Democratic claims that George had deliberately excluded information from an earlier audit of the IRS that would have showed that liberals, too, had been subjected to inappropriate treatment. George also noted in the letter that he provided information about the additional lists to House and Senate committees on June 7.

Looking past that, Levin on Thursday called on the committee to haul George in for more testimony under oath, and he repeated that the exclusion was a “fundamental flaw in the foundation of the investigation and the public’s perception of this issue.”

Ostensibly, Thursday’s hearing was held to question Werfel, barely on the job for more than a month, about his 30-day report to update his ongoing investigation. The report outlined changes made to rectify inadequate controls and to remove senior leaders from their posts.

But Werfel’s report provided scant information about how the agency came to target conservative groups, and how some anti-abortion groups, as reported by McClatchy in May, appeared to have approval of their applications for tax-exempt status linked to a pledge to refrain from picketing Planned Parenthood offices.

“Mr. Werfel, this report is a sham. I’d call it a whitewash, but it’s too thin and unsubstantial to even meet that description,” Rep. Kevin Brady, R-Texas, told Werfel Thursday, criticizing him for saying there is no evidence of intentional wrongdoing by IRS employees. “I’m told you are a decent person, so are you serious about getting to the truth?”

The new IRS leader, a career technocrat who has served in Republican and Democratic administrations, tried to clarify that views in his report reflected only an initial response. But the committee’s chairman, Rep. Dave Camp, R-Mich., called it “not necessarily an initial conclusion but an incomplete one.” At one point, Werfel tried to elaborate but the usually polite Camp interrupted to scold, “Mr. Werfel, I control the time.”

Republicans unsuccessfully pressed Werfel for more information on Lois Lerner, the head of the Exempt Organizations division when the scandal broke in May. She appeared before the House Committee on Oversight and Government Reform on May 22, read a statement asserting her innocence and then invoked her constitutional right to remain silent.

The chairman of that committee, California Republican Rep. Darrell Issa, has scheduled a hearing for Friday to determine whether Lerner, by first asserting she had done no wrong, had effectively waived her constitutional protections and must testify.